The Wealth of Ideas A History of Economic Thought review by Alessandro Roncaglia
The author critically examines economic history through the lens of Sraffa's "Production of Commodities by Means of Commodities," suggesting its superiority over the mainstream neoclassical model. This model, rooted in Benthamite Utilitarianism's rational economic man, is epitomized by Subjective Expected Utility (SEU) theory, a synthesis of various subjectivist and utility-game theory approaches.
However, the author neglects Keynes's seminal contribution in the General Theory, focusing instead on Dennis Robertson's peculiar assertion regarding Chapter 3. This viewpoint, embraced by several economists like Richard Kahn, Austin Robinson, and Joan Robinson, overlooks Keynes's insights in chapters 19, 20, and 21, particularly concerning effective demand and aggregate supply.
The author's discussion of Keynes's theory of effective demand and aggregate supply is deemed inadequate, revealing a misunderstanding of Keynes's framework. Furthermore, the author suggests a future shift towards a Sraffa-based economic analysis, but fails to reconcile Sraffa's rejection of liquidity preference, a cornerstone of Keynes's theory.
Ultimately, the integration of Sraffa and Keynes appears problematic due to fundamental differences in their theoretical foundations, particularly regarding uncertainty. The author and Sraffa lack recognition of the connections between Keynes's analyses in the General Theory and A Treatise on Probability, further complicating their compatibility.